Italy, Japan reach grid parity

[mooncliff]

It seems Italy has already reached grid parity, and Japan is about to reach grid parity next year instead of 2020 as previously forecast.

See in particular page 4. The graph shows that grid parity is reached first in places with relatively high electricity rates and with high insolation.

http://techon.nikkeibp.co.jp/article...26/181377/?P=1

The electricity rate in Japan is about 25 cents a kWh, and the feed-in tariff is about 50 cents a kWh.

A 4 kW turnkey residential system by Sharp is advertised in major electronics stores in Tokyo at US$20,000.

I see many systems going up around Tokyo. For the first time in my neighborhood I see a house being built with a flat roof entirely inclined to the south (instead of having a peak in the middle), so I guess they intend to install photovoltaics and/or a solar water heater.

Whether or not the forecasts in the article turn out to be correct, the article does discuss many of the factors that will affect the economics of a transition to photovoltaics in a distributed system.


Simplifying installation and system design is also reducing costs.

http://www.scientificamerican.com/bl...chi-2010-04-08


So, can we maybe move up our estimate of when we will get the renewable energy bubble? Is the bull in that picture closer than it appears?


UPDATE
I think the link expired. Maybe this one will work. There are lots of interesting graphs.
http://techon.nikkeibp.co.jp/article...100326/181377/

And now grid parity has come even closer because the Greece crash is causing Spain to cancel photovoltaic plans. The glut is going be huge... prices should crash even faster than suggested by the article above.
http://www.businessweek.com/news/201...-update1-.html
Before the end of the year, while there is liquidation, but before stimulus runs out, could be an opportunity.

[Rajiv]

Re: Italy, Japan reach grid parity

If the true costs of coal and nuclear power generation were accounted for, most of the world would already be at grid parity. Since the social costs incurred to society at large are dispersed, and not accounted for, as they are considered to be "external" to the economic paradigm, it results in artificially low tarriffs being charged for power, while society pays for the true cost of power in other ways.

Even in Japan, the "extra" tariff may not go towards contributing to ameliorating the "external" costs, but rather, perhaps only to engorging the public funds -- that may then be spent in other ways that may exacerbate the problems..

[GRG55]

Re: Italy, Japan reach grid parity

It seems Italy has already reached grid parity, and Japan is about to reach grid parity next year instead of 2020 as previously forecast.

See in particular page 4. The graph shows that grid parity is reached first in places with relatively high electricity rates and with high insolation.

http://techon.nikkeibp.co.jp/article...26/181377/?P=1

The electricity rate in Japan is about 25 cents a kWh, and the feed-in tariff is about 50 cents a kWh.

A 4 kW turnkey residential system by Sharp is advertised in major electronics stores in Tokyo at US$20,000.

I see many systems going up around Tokyo. For the first time in my neighborhood I see a house being built with a flat roof entirely inclined to the south (instead of having a peak in the middle), so I guess they intend to install photovoltaics and/or a solar water heater.

Whether or not the forecasts in the article turn out to be correct, the article does discuss many of the factors that will affect the economics of a transition to photovoltaics in a distributed system.


Simplifying installation and system design is also reducing costs.

http://www.scientificamerican.com/bl...chi-2010-04-08


So, can we maybe move up our estimate of when we will get the renewable energy bubble? Is the bull in that picture closer than it appears?

"...As is so often pointed out, photovoltaic power generation does have a drawback: output is low when it's raining, can fluctuate considerably with clouds and other conditions, and is zero at night. This problem can be overcome to a large degree by using storage batteries, however. If solar power generating systems equipped with storage batteries achieve grid parity, the impact (including the reduction in fossil fuel consumption) will be enormous..."

The urban systems would seem to favour connection to the existing grid in part to benefit from sales of electricity during periods of surplus and to be able to draw from the grid during periods of demand exceeding power generation from the PVs.

Although one might expect the electricity utility companies to lower their costs to better compete with PV installations, in fact I suspect exactly the opposite is going to occur in these markets - electricity costs from the grid are going to increase. The utilities are going to sell less power, and charge a lot more for it as their role shifts to becoming standby and peak service providers of power.

[mooncliff]

Re: Italy, Japan reach grid parity

"...As is so often pointed out, photovoltaic power generation does have a drawback: output is low when it's raining, can fluctuate considerably with clouds and other conditions, and is zero at night. This problem can be overcome to a large degree by using storage batteries, however. If solar power generating systems equipped with storage batteries achieve grid parity, the impact (including the reduction in fossil fuel consumption) will be enormous..."

The urban systems would seem to favour connection to the existing grid in part to benefit from sales of electricity during periods of surplus and to be able to draw from the grid during periods of demand exceeding power generation from the PVs.

Although one might expect the electricity utility companies to lower their costs to better compete with PV installations, in fact I suspect exactly the opposite is going to occur in these markets - electricity costs from the grid are going to increase. The utilities are going to sell less power, and charge a lot more for it as their role shifts to becoming standby and peak service providers of power.

Certainly trying to guess how that will play out is even more difficult than trying to guess the future economics of the photovoltaics, but on Oahu, 30 years ago, when people began to install solar water heaters (Oahu has almost no municipal gas or oil boilers, so almost all hot water was electric), the common wisdom was that as people installed solar water heaters, the electric company would jack up the rates. But a funny thing happened: even though the population grew substantially, as solar water heating went from zero to producing about a quarter of the hot water, total electricity use did not go up very much, and so planned new power plants were scrapped, and it turned out that the rate did not increase, taking into account oil price (almost all the electricity is generated by oil in Hawaii) and inflation.

Japan has a lot of excess electrical generating capacity, and really the only time electricity supply becomes a problem is for a few hours each day in the first two weeks of August, when it is usually sunny and mercilessly hot and humid. An extensive distributed photovoltaic system would help to meet this peak demand. It is usually also very clear and sunny in the winter. I have seen large south facing walls of shopping malls covered in photovoltaics to take advantage of the intense sunlight in winter, and these photovoltaics also perform well using the bright diffuse light from the summer haze.

[GRG55]

Re: Italy, Japan reach grid parity

Certainly trying to guess how that will play out is even more difficult than trying to guess the future economics of the photovoltaics, but on Oahu, 30 years ago, when people began to install solar water heaters (Oahu has almost no municipal gas or oil boilers, so almost all hot water was electric), the common wisdom was that as people installed solar water heaters, the electric company would jack up the rates. But a funny thing happened: even though the population grew substantially, as solar water heating went from zero to producing about a quarter of the hot water, total electricity use did not go up very much, and so planned new power plants were scrapped, and it turned out that the rate did not increase, taking into account oil price (almost all the electricity is generated by oil in Hawaii) and inflation.

Japan has a lot of excess electrical generating capacity, and really the only time electricity supply becomes a problem is for a few hours each day in the first two weeks of August, when it is usually sunny and mercilessly hot and humid. An extensive distributed photovoltaic system would help to meet this peak demand. It is usually also very clear and sunny in the winter. I have seen large south facing walls of shopping malls covered in photovoltaics to take advantage of the intense sunlight in winter, and these photovoltaics also perform well using the bright diffuse light from the summer haze.

If Japan has a lot of excess electrical generating capacity why is the power rate so high at 25 cents per kWh?

[mooncliff]

Re: Italy, Japan reach grid parity

If Japan has a lot of excess electrical generating capacity why is the power rate so high at 25 cents per kWh?

The excess generating capacity is there, and is usually idle, to meet those few hours of peak demand on summer days, and so that there is enough capacity when reactors and generators automatically shut down during quakes, which can happen every day.

The grid in Japan is very robust. Even after lightning strikes, everything resets automatically in a minute or so. The only time there has been a major black out in the last 40 years in Tokyo was when a crane snagged high tension wires and when a plane crashed into some high tension wires. Other than that, there are very few problems. Even in Kobe after the huge quake in 1995, I was surprised that the electricity in most places was working.

Actually, you have to pay for that excess capacity, so while the rate is high, the power only went out in my place once for about 2 hours in the last 20 years when the plane flew into the high tension wires. I think the figure I have seen quoted is that the antiquated US grid costs 100 billion annually in lost productivity.

[c1ue]

Re: Italy, Japan reach grid parity

Certainly trying to guess how that will play out is even more difficult than trying to guess the future economics of the photovoltaics, but on Oahu, 30 years ago, when people began to install solar water heaters (Oahu has almost no municipal gas or oil boilers, so almost all hot water was electric), the common wisdom was that as people installed solar water heaters, the electric company would jack up the rates. But a funny thing happened: even though the population grew substantially, as solar water heating went from zero to producing about a quarter of the hot water, total electricity use did not go up very much, and so planned new power plants were scrapped, and it turned out that the rate did not increase, taking into account oil price (almost all the electricity is generated by oil in Hawaii) and inflation.

Planned power plants are not the only reason for rate increases.

As was shown in this iTulip article, the utilities themselves base their business on a fixed rate of revenue to offset their fixed cost basis:

http://www.itulip.com/forums/showthread.php?t=15103

As revenue falls, then the rate must increase to compensate.

If the utilities in turn must pay above normal rates for incremental feed-in solar power, then the likelihood of rate increases logically should increase, not decrease.

As the rates in Hawaii appear to be going up much as anywhere else, it is unclear that solar power is doing what you are asserting:

http://www.eia.doe.gov/cneaf/electri...es_revenue.xls

1990	HI Total	238,408	223,319	282,628	749,848	2,323,950	2,194,417	10.26	10.18
1991	HI Total	252,001	237,453	290,943	785,901	2,395,665	2,297,843	10.52	10.33
1992	HI Total	265,829	248,185	298,596	818,526	2,438,376	2,356,266	10.90	10.53
1993	HI Total	303,167	276,058	337,239	922,798	2,468,578	2,363,223	12.28	11.68
1994	HI Total	318,369	296,882	334,157	955,909	2,556,879	2,542,917	12.45	11.67
1995	HI Total	347,278	330,986	352,471	1,037,706	2,606,283	2,721,153	13.32	12.16
1996	HI Total	381,537	358,572	389,508	1,137,044	2,675,881	2,761,274	14.26	12.99
1997	HI Total	394,851	368,824	397,998	1,169,189	2,668,050	2,781,653	14.80	13.26
1998	HI Total	364,931	341,787	356,513	1,070,225	2,640,641	2,776,069	13.82	12.31
1999	HI Total	384,432	367,806	363,683	1,123,125	2,689,147	2,887,392	14.30	12.74
2000	HI Total	453,650	449,707	448,081	1,359,755	2,764,617	3,035,748	16.41	14.81
2001	HI Total	457800	463606	442536	1374490	2802470	3129441	16.34	14.81
2002	HI Total	453157	446998	415429	1324838	2898380	3167933	15.63	14.11
2003	HI Total	506552	528299	469075	1503926	3027624	3517123	16.73	15.02
2004	HI Total	571200	588079	525600	1684879	3162192	3632408	18.06	16.19
2005	HI Total	655008	659278	617583	1931869	3164065	3463147	20.70	19.04
2006	HI Total	742993	747603	699556	2190152	3182432	3489733	23.35	21.42
2007	HI Total	772068	771204	710171	2253443	3200725	3520234	24.12	21.91
2008	HI Total	1002587	1040495	990936	3034018	3085237	3500753	32.50	29.72
2009	HI Total	739412	740570	668142	2148124	3055242	3387797	24.20	21.86

Or are you saying that a doubling of electricity prices in 15 years is an improvement?

[mooncliff]

Re: Italy, Japan reach grid parity

Planned power plants are not the only reason for rate increases.

As was shown in this iTulip article, the utilities themselves base their business on a fixed rate of revenue to offset their fixed cost basis:

http://www.itulip.com/forums/showthread.php?t=15103

As revenue falls, then the rate must increase to compensate.

If the utilities in turn must pay above normal rates for incremental feed-in solar power, then the likelihood of rate increases logically should increase, not decrease.

As the rates in Hawaii appear to be going up much as anywhere else, it is unclear that solar power is doing what you are asserting:

http://www.eia.doe.gov/cneaf/electri...es_revenue.xls



Or are you saying that a doubling of electricity prices in 15 years is an improvement?

If this is for Hawaii total, this really complicates the picture. Each island is a separate grid and has very different characteristics.

OK, now adjust for inflation. Ballpark 1990 to 2010, that should be around 60 percent, so 10 cents in 1990 is about 16 cents now.

Adjust for oil going from around 20 dollars a barrel to around 100. Oil prices started to rise about 2003. At that point, the electrical rate was 16 cents. The electricity on Oahu is almost all from oil, so that is why the oil price affects the electrical rate more than most places.

What we would need to do is to compare Oahu with a quarter solar water heating and Oahu with no solar water heating over this same time period.

[c1ue]

Re: Italy, Japan reach grid parity

If this is for Hawaii total, this really complicates the picture. Each island is a separate grid and has very different characteristics.

OK, now adjust for inflation. Ballpark 1990 to 2010, that should be around 60 percent, so 10 cents in 1990 is about 16 cents now.

Adjust for oil going from around 20 dollars a barrel to around 100. Oil prices started to rise about 2003. At that point, the electrical rate was 16 cents. The electricity on Oahu is almost all from oil, so that is why the oil price affects the electrical rate more than most places.

What we would need to do is to compare Oahu with a quarter solar water heating and Oahu with no solar water heating over this same time period.

I don't know about that. For one thing, Oahu holds 75% of the total population of Hawaii. (Wiki)

Given this, I think it is very reasonable to use the entire state as a proxy for Hawaii.

If we then compare electricity usage (not cost) against say the US overall - we can get an idea of just how Hawaii as a state, as a proxy for Oahu in particular, fares against the national average - both adjusted for relative population increases.

If there is a significant deviation, then perhaps the solar program is to credit.

I think it is safe to say there is nowhere near a 25% install base in the overall US for solar.

US stats:

	Residential Electricity Increase	47.49%
	Population Increase	23.44%
	Relative electricity usage increase	202.62%

Hawaii stats:

	Residential Electricity Increase	31.47%
	Population Increase	16.32%
	Relative electricity usage increase	192.85%

US population data from Census 1990 and 2009 estimates, Hawaii population data from Population_state_09_fact-12-23-09.pdf via Hawaii.gov.

From this is doesn't appear there is a significant difference at all - the lower rate of increase of electricity usage for Hawaii may well be a function of Hawaii's significantly higher prices.

Note if there is significant solar installation, my bet is that this usage isn't even reflected in the above numbers: I doubt the utility measures the solar electricity generated and used in your own home!

If so then the Hawaii usage numbers are even higher - easily on par with the US overall.

From this it doesn't seem that even the large solar installation percentage in Hawaii has affected overall usage to any significant degree.

[santafe2]

Re: Italy, Japan reach grid parity

It seems Italy has already reached grid parity, and Japan is about to reach grid parity next year instead of 2020 as previously forecast.

See in particular page 4. The graph shows that grid parity is reached first in places with relatively high electricity rates and with high insolation.

Insolation yields run from about 1.1 kWh per installed watt to 1.8 depending on latitude. Angle of install and azimuth also effect output. In an average location where a kWh costs 25 cents and an installed watt is worth 40 cents per year and the install costs, $5 per watt, the payback is 15-20 years without subsidy. Much better than it was 2 years ago.

As for grid parity, that's a much more sticky subject. It really depends on how one views the overall cost of fossil fuel.

The electricity rate in Japan is about 25 cents a kWh, and the feed-in tariff is about 50 cents a kWh.

A 4 kW turnkey residential system by Sharp is advertised in major electronics stores in Tokyo at US$20,000.

The new government is very interested in a more sustainable energy infrastructure. The payback will be quick with this type of feed it tariff.

Whether or not the forecasts in the article turn out to be correct, the article does discuss many of the factors that will affect the economics of a transition to photovoltaics in a distributed system.
So, can we maybe move up our estimate of when we will get the renewable energy bubble? Is the bull in that picture closer than it appears?

As has been discovered in Germany a high level of distributed energy is a difficult way to maintain a viable grid. The limit under the current grid structure is about 25% distributed PV. To increase this will require a more intelligent infrastructure and better battery technology. Both are coming but not this decade.

[mooncliff]

Re: Italy, Japan reach grid parity

I don't know about that. For one thing, Oahu holds 75% of the total population of Hawaii. (Wiki)

Given this, I think it is very reasonable to use the entire state as a proxy for Hawaii.

If we then compare electricity usage (not cost) against say the US overall - we can get an idea of just how Hawaii as a state, as a proxy for Oahu in particular, fares against the national average - both adjusted for relative population increases.

If there is a significant deviation, then perhaps the solar program is to credit.

I think it is safe to say there is nowhere near a 25% install base in the overall US for solar.

US stats:


Hawaii stats:


US population data from Census 1990 and 2009 estimates, Hawaii population data from Population_state_09_fact-12-23-09.pdf via Hawaii.gov.

From this is doesn't appear there is a significant difference at all - the lower rate of increase of electricity usage for Hawaii may well be a function of Hawaii's significantly higher prices.

Note if there is significant solar installation, my bet is that this usage isn't even reflected in the above numbers: I doubt the utility measures the solar electricity generated and used in your own home!

If so then the Hawaii usage numbers are even higher - easily on par with the US overall.

From this it doesn't seem that even the large solar installation percentage in Hawaii has affected overall usage to any significant degree.

Ah, this is really complicated.

20 years ago, almost no one had air conditioning; now it is quite common.

The entire west side of Oahu was sparsely populated; now, it is half of the city. It is really hot out on the west side, and many people complain about 200 to 300 dollar air conditioning bills.

In order to come to any kind of conclusion, you would have to not look at a few tables. You would have to actually watch in detail what happened over the last 30 years.

Personally, my dad's electric bill went from $4,000 a year to $150 dollars a year because he installed a solar water heater and photovoltaics. My mom's house is about the same. Our neighbors complain that their electric bills are 200 to 300 dollars a month.

The point of my original post is that these things are REALLY complicated. This is why you cannot pull out a table and conclude anything about global warming, for example. It takes several thousand hours of time.

What one needs to do if one wants to guess about outcomes like this is learn about the factors involved.

[santafe2]

Re: Italy, Japan reach grid parity

I think it is safe to say there is nowhere near a 25% install base in the overall US for solar.

Less than 1%

From this is doesn't appear there is a significant difference at all - the lower rate of increase of electricity usage for Hawaii may well be a function of Hawaii's significantly higher prices.

Yes and the fact the population is relatively poor.

Note if there is significant solar installation, my bet is that this usage isn't even reflected in the above numbers: I doubt the utility measures the solar electricity generated and used in your own home!

HECO, who we work with regularly, measures every kWh produced by a home with PV through net metering. But even in Hawaii PV installations are not yet a significant contributor to the grid.

From this it doesn't seem that even the large solar installation percentage in Hawaii has affected overall usage to any significant degree.

The percentage is still very small so looking at it from a macro POV will not likely yield a core answer. We see a tendency for PV users to increase their use of electricity once it is paid for. That's an interesting human failing and it doesn't seem to follow any ideological path.

[santafe2]

Re: Italy, Japan reach grid parity

What one needs to do if one wants to guess about outcomes like this is learn about the factors involved.

As always, the devil is in the details. Hawaii is a location largely dependent on oil. When the price of oil moves up, so does the cost of electricity. As does Japan, Hawaii highly subsidizes renewable energy in the hope that they can contain future costs and cost fluctuations. Unlike California, Hawaii and Japan cannot build out a cheap short term energy infrastructure dependent on natural gas. Hawaii and Japan are on the forefront of the new, expensive energy world. We will be served well to observe how these places resolve their energy requirements.

[c1ue]

Re: Italy, Japan reach grid parity

Personally, my dad's electric bill went from $4,000 a year to $150 dollars a year because he installed a solar water heater and photovoltaics. My mom's house is about the same. Our neighbors complain that their electric bills are 200 to 300 dollars a month.

The point of my original post is that these things are REALLY complicated. This is why you cannot pull out a table and conclude anything about global warming, for example. It takes several thousand hours of time.

I'm not sure what your point is.

You have an anecdote which shows a massive decrease in grid usage of electricity due to solar installation.

You similarly have stated the 25% of the island uses PV for at least some of its electricity use - e.g. hot water heating.

I've compared total electricity usage numbers for Hawaii - of which 75% represents Oahu by population - which shows that the rate of increase of electricity use as a function of population increase is very very similar to that of the US as a whole.

Unless you can argue that Hawaii has some special circumstances which don't apply to the US as a whole - i.e. a difference in the ramp up of air conditioning use in the continental US vs. Hawaii, very unlikely - then simple arithmetic dictates that massive PV installations plus massive decrease in electricity use should impact Hawaii's overall electricity usage pattern.

It has not.

A more likely answer is that water heating is a relatively miniscule part of the overall electric bill. This would be consistent with the data.

The percentage is still very small so looking at it from a macro POV will not likely yield a core answer. We see a tendency for PV users to increase their use of electricity once it is paid for. That's an interesting human failing and it doesn't seem to follow any ideological path.

Certainly the signal to noise ratio is low.

As I note above, the anecdotes about $4000 electrical bills going to nearly zero are clearly isolated examples. Even a 5% participation should yield a much clearer delta vs. the US average than exists.

But nonetheless the big picture is still valid: despite more than a decade of solar subsidies (according to mooncliff), the Hawaii electrical usage pattern has not significantly deviated from either its own historical pattern nor the overall US pattern.

[santafe2]

Re: Italy, Japan reach grid parity

But nonetheless the big picture is still valid: despite more than a decade of solar subsidies (according to mooncliff), the Hawaii electrical usage pattern has not significantly deviated from either its own historical pattern nor the overall US pattern.

Your point is what? We should continue business as usual?